Owner of construction company that built Palmer Square surrenders to feds on fraud charges

PRINCETON — The owner of a construction company that worked extensively on the Palmer Square Project in Princeton surrendered to federal agents Wednesday morning on charges of filing false income taxes.

Frank Chimento Jr., the owner of Parsippany-based Chimento Construction, failed to collect and turnover federal and state payroll taxes totaling more than $1 million, evaded personal income taxes on more than $1.4 million in income, and falsified reports with respect to union benefit fund contributions, U.S. Attorney Paul J. Fishman announced.

Three of his employees, Joseph Carsillo, Frank Chimento III, and Carl J. Corso were arrested on charges including filing false income tax returns, bankruptcy fraud, and a mail fraud scheme to defraud the state of New Jersey with respect to unemployment compensation benefits. All four defendants were scheduled to make their initial appearances late Wednesday in Newark federal court.

From 2008 through 2011, the Chimento’s primary construction job was the Palmer Square project.

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According to a release from the U.S. Attorney’s office, Chimento Companies allegedly operated a cash payroll for a significant portion of the wages paid to employees during the period 2006 through 2011.

“Allegedly at Chimento Jr.’s direction, a conspirator (CC-1) who is not named in the complaints conducted structured cash transactions at several separate financial institutions to obtain cash to fund the payroll and in an attempt to avoid currency transaction reports from being filed. CC-1 would then purportedly prepare envelopes containing cash payroll based on the hours and wage rate information provided by Chimento Jr., who, as owner, was responsible for collecting, accounting for and paying over to the IRS withholdings from employees for Social Security, Medicare, and income taxes (collectively referred to as ‘payroll taxes’),” the release said.

The release says that Carsillo was responsible for keeping track of employees’ hours and would furnish that information to CC-1, which was used to determine the cash wages due to each employee. According to the complaint, Carsillo received total cash wages from the company of approximately $167,466 during the years 2009 through 2011, which he failed to include on his personal tax returns for those years.

Chimento III, who has worked for the company for 10 years, filed with the IRS a 2007 Individual Income Tax Return that was not correct as it did not include $45,860 he received from his employment with the Chimento Companies, according to the release. He also allegedly willfully did not file individual income tax returns from 2008 through 2011 although he received a Form 1099 for $100,000 in cash wages in 2008, and a total of $351,788 in cash wages during the years 2009 through 2011.

As well as not filing cash wages on his personal taxes, Corso, a Hamilton resident, Corso is also charged with a scheme to defraud the N.J. Department of Labor and Workforce Development with respect to unemployment compensation benefits. On Nov. 1, 2009, Corso advised the NJDOL-WD that he was no longer working and reactivated an earlier application for unemployment benefits and was awarded a weekly benefit of $526. He collected a total of $19,988 through the U.S. mail.

Chimento Jr. has 34 counts against him, and each carries multiple years in prison and/or fines. Carsillo has 38 counts against him, and also faces multiple years in prisons accompanied by fines. Chimento III and Corso each have five and nine counts, respectively, which carry the same types of punishment.

About the Author

Megan Goldschmidt is the Hamilton, Princeton, and Robbinsville beat reporter for the Trentonian. She recently launched her career in the journalism industry after graduating from Ithaca College, and enjoys learning about different areas and industries with every new story she writes. Reach the author at mgoldschmidt@trentonian.com
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